NACL Industries Ltd Directors Report

Dear Members,

Your Directors have pleasure in presenting the 38^th Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2025.

Operating Results:

Your Companys performance during the year as compared with that during the previous year is summarized below:

Particulars	Consolidated	Standalone
	2024-25	2023-24	2024-25	202324
Total Income (including Other Income)	1,24,256	1,78,729	1,26,177	179,074
Profit/(Loss) before share of profit from Associate, Finance Cost, Depreciation and Tax	(5,483)	2,558	(5,698)	1,632
Finance Cost	6,495	7,572	4,948	6,010
Depreciation and Amortization Expense	2,905	2,724	1,930	1,835
Profit/(Loss) before share of profit from Associate, exceptional items and Tax	(14,883)	(7,738)	(12,576)	(6,213)
Exceptional income	2,926		2,926	-
Profit/(Loss) after exceptional items and before share of profit from Associate & Tax	(11,957)		(9,650)	(6,213)
Share of profit/(Loss) from Associate	33	108	-	-
Profit/(Loss) before tax	(11,924)	(7,630)	(9,650)	(6,213)
Current Tax	1	-	-	-
Deferred Tax	(2,712)	(1,741)	(2,342)	(1,517)
Profit/(Loss) for the year	(9,213)	(5,889)	(7,308)	(4,696)
Other Comprehensive Income	(319)	(108)	(319)	(111)
Total Comprehensive Income	(9,532)	(5,997)	(7,627)	(4,807)
Balance of profit brought forward from previous year	31,206	37,693	32,759	38,056
TOTAL	21,674	31,696	25,132	33,249
Appropriation
Dividend on equity shares	-	497	-	497
Less: Effective portion of cash flows hedges	16	(7)	16	(7)
Balance profit carried forward to balance sheet	21,690	31,206	25,148	32,759

Performance Overview:

FY 2024-25 remained a challenging year, marked by erratic monsoons, uneven rainfall, and subdued agri-input demand, which slowed growth in the Retail Formulation business. The Technical segment was impacted by global headwinds, including inventory overhang, weak demand, and intense pricing pressure. Further, curtailment of working capital lines in the second half constrained raw material procurement and order execution, just as early signs of recovery were emerging. Consequently, consolidated revenue declined by 30% to Rs124,256 lakhs (comparing to Rs178,729 lakhs in FY 2023-24), with a loss before exceptional items and taxes of Rs14,883 lakhs and a net loss after tax of Rs9,213 lakhs.

Transfer to Reserves:

The Company has not transferred any amount to the General Reserve during the year under review.

Dividend & Dividend Distribution Policy:

The Directors have not recommended any dividend for the year under review. As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Company has adopted a Dividend Distribution Policy and the same is available on the website of the Company at https://naclind.com/wpcontent/ uploads/2025/02/Dividend-Distribution-Policv.pdf.

Domestic Markets:

NACLs domestic retail business remained focused on empowering Indian farmers with sustainable and affordable crop protection solutions. However, challenging market conditions adversely impacted sales across categories.

During the southwest monsoon (June-September 2024), rainfall was 108% of the long-period average (LPA). Yet, its uneven distribution and prolonged dry spells disrupted cropping patterns and affected demand. Similarly, while the northeast monsoon (October-December 2024) was close to the LPA at the national level, regional variations were significant. November witnessed a sharp deficit, followed by excess rainfall in December, further constraining recovery in several affected regions.

Amid these challenges, the Company continued its farmer-centric approach, reinforcing field marketing programs and strengthening channel relationships. Despite sustained efforts, domestic retail sales for FY 2024-25 stood at Rs64,185 lakhs.

Insecticides:

The insecticide segment came under pressure during the year, primarily due to reduced cotton acreage caused by early-season dry spells and lower chilli cultivation driven by weak commodity prices. Despite these challenges, the segment reported revenue of Rs38,190 lakhs, as against Rs48,715 in the previous year. Insecticides account for over 45% of Indias agrochemical market, where NACL continues to maintain a strong presence. Further strengthening this position, the Company launched two new products, Speed and

Pyrakill, targeting major crops including fruits and vegetables, a segment witnessing rising domestic demand.

The insecticide segment faced pressure due to reduced cotton acreage from early-season dry spells and a decline in chilli cultivation caused by low commodity prices. This led to sluggish movement and revenue of Rs 38,190 lakhs.

Herbicides:

The herbicide market continued its growth trajectory during the year, with labour shortages further driving the adoption of chemical weed control and integrated weed management solutions. To address this demand, NACL introduced two new products - Dash for paddy and Carpet for wheat, Indias key staple food crops. However, erratic rainfall patterns delayed the sowing of major kharif crops, thereby narrowing the weed control window and softening demand. As a result, the herbicide segment recorded revenue of Rs11,808 lakhs for the year under review, as against Rs16,445 lakhs in the previous year.

Fungicides:

The fungicide segment generated revenue of Rs11,817 lakhs during the year under review, as against Rs5,16,809 lakhs in the previous year, supported primarily by strong brands such as Oscar, Index, andSivic. NACL continues to strengthen its technical support and field services to help farmers maximise product benefits, with a focus on driving sustainable, long-term growth in this category.

Plant Growth Regulators/Bio stimulants:

The segment achieved revenue of Rs2,370 lakhs during the year under review, as against Rs3,926 lakhs in the previous year. NACL continues to strengthen its innovation focus on developing next- generation PGRs and Bio-stimulants that deliver both performance and environmental benefits. Flagship products such as Atonik—a unique CIBRC-approved formulation—and Gallant remain well- recognised for their consistent quality and farmer trust.

International Market:

In 2024, the global crop protection industry witnessed a second consecutive year of decline, primarily due to reduced consumption arising from unfavorable weather conditions across Asia, Latin America, and Europes cereal-growing regions. This impact was further compounded by lower agrochemical and commodity prices. Industry estimates indicate a 7% decline in value, reducing the market to USD 77 billion, with all regions experiencing a downturn. The decline was around 7% in South America, the Middle East- Africa, and Asia-Pacific, compared with 5.5% in North America and 5% in Europe. Indias agrochemical exports also contracted by 3% during the year, to USD 4.2 billion.

NACL continued to pursue its international growth strategy by leveraging Key Accounts and Focus Markets as twin drivers. Demand for select products showed signs of recovery in South America, aided by destocking. Volumes of the key insecticide Profenofos and the fungicide Tricyclazole from Key Accounts rebounded to normal levels after two years of subdued demand. In Focus Markets, efforts were directed at expanding the technical business into markets such as Vietnam while sustaining the formulation business in Africa.

Despite these positive developments, FY 2024-25 remained challenging, with international sales revenue contracting to Rs30,956 lakhs as against Rs40,992 lakhs in the previous year. The decline was primarily due to a steep fall in both price and volume of the high-value product Propiconazole across markets, the absence of a Flucarbazone campaign, pricing pressures in focus markets, and certain internal challenges.

Looking ahead, the business remains confident of future growth, driven by its dual strategy. Plans include introducing new active ingredients and intermediates to Key Accounts, while scaling up volumes in Focus Markets through increased registrations of generic and differentiated formulations.

Plant Operations:

The Srikakulam technical plant achieved an annual production of 9,392 MT during the year under review, compared to 7,275 MT in the previous year. The decline in output was primarily due to subdued demand for various Active Ingredients (Als), despite productivity improvements in recent years. The plant continued to implement initiatives in energy conservation, effluent reduction, and cost savings, with the Zero Liquid Discharge facility operating efficiently throughout the year.

The Ethakota formulation unit recorded production of 23,783 MT/KL, 28% lower than the previous years 33,096 MT/KL. The unit has been undertaking various initiatives for debottlenecking, productivity enhancement, safety, and quality improvements.

Safety, quality, efficiency enhancement, and waste reduction remain the paramount themes across all manufacturing facilities. Both units have fostered a positive working environment, leading to improved productivity and stronger engagement at all levels.

Credit Rating:

The CRISIL Ratings Limited (CRISIIL) vide the letter dated February 19, 2025 has assigned the rating for the Long-Term Bank facilities and Short-Term Bank facilities of the Company, the details of which are given herein below:

a) Long-term Bank facilities: CRISIL BB+/Negative (Downgraded from CRISIL BBB-/Negative); and

b) Short-term Bank facilities: CRISIL A4+(Downgraded from CRISIL A3).

Fire Insurance Claim

With reference to the appeal filed by M/s. Oriental Insurance Company Limited ("OIC"/"Insurance Company") before the Honble High Court of Delhi against the Arbitration Award, it may be noted that the appeal was disposed off in favor of the Company. Pending final disposal of the said appeal, the Company had filed execution petitions before the Honble High Court of Delhi seeking deposit of the awarded amounts, being Rs1,649 lakhs (including interest) under the Material Damage (MD) Policy and Rs1,277 lakhs (including interest) under the Business Interruption Policy.

Pursuant to these petitions, the Honble High Court of Delhi, vide its orders dated March 19, 2021 and April 9, 2021, directed the Insurance Company to deposit the awarded amounts together with applicable interest with the Court. During FY 2021-22, the said amounts were released by the Court in favour of the Company upon submission of an equivalent bank guarantee.

Subsequently, during the year under review, the Honble High Court of Delhi, vide its order dated February 13, 2025, dismissed the appeal filed by the Insurance Company and upheld the Arbitration Award in favour of the Company. Pursuant to this favourable ruling, the Company has recognized the award amount of Rs2,926 lakhs (already received in earlier years) as Exceptional Income for the financial year ended March 31, 2025.

Subsidiary Companies:

A) NACL Spec-Chem Limited (NSCL), India:

After successfully commissioning and commercializing the first phase of its project with a capacity of 6,000 MTPA during the previous year, NSCL continued its efforts to maximize capacity utilization. The plant has been operating effectively and producing its intended products and capacity; however, the benefits of full-scale operations are yet to be realized.

The total revenue from operations of the Company for the year ended March 31, 2025, stood at Rs9,644 lakhs as against Rs17,848 lakhs in the previous year. The Company reported a loss after tax of Rs1,844 lakhs, compared to a loss of Rs1,243 lakhs in the previous year.

During the year under review, NSCL was conferred the prestigious Gold 5S Award by the Quality Circle Forum of India (QCFI), Vadodara under the category of Business Responsibility, Sustainability Reporting, and Environmental, Social & Governance (ESG), in January 2025.

B) NACL Multichem Private Limited (NMPL), India:

After successfully commissioning a new production line for powder-form nutrients in the previous year, the Company launched and commercialized advanced formulations of Zinc HEDP and Iron HEDP, which received encouraging market response. These product introductions, coupled with the successful onboarding of new customers, are likely to strengthen NMPLs market presence and position it as a reliable provider of high-quality, technology-driven solutions for modern agriculture.

For the year ended March 31, 2025, the Company recorded total revenue from operations of Rs9 lakhs as against Rs2 lakhs in the previous year and reported a loss after tax of Rs57 lakhs as compared to a loss of Rs1 lakh in the previous year.

C) LR Research Laboratories Private Limited (LRRLPL), India:

The total revenue of the LRRPL for the year ended March 31, 2025 was continue to be Nil.

D) Nagarjuna Agrichem (Australia) Pty Limited (NAAPL), Australia

NAAPL was established to hold local registrations on behalf of the Company to facilitate product sales in Australia. For the year ended March 31, 2025, the Company reported total revenue of Rs12 lakhs, which was at the same level as the previous year. The profit after tax stood at Nil, as against Rs3 lakhs in the previous year.

E) NACL Industries (Nigeria) Limited (NINL), Nigeria:

NINL, incorporated on January 13, 2023, is a wholly-owned subsidiary of the Company. The entity was set up primarily to obtain and hold local registrations in Nigeria, enabling the Company to market and distribute its products in the region. These registrations are issued by the respective government authorities only to entities incorporated within the country.

F) NACL Agri-Solutions Private Limited (NASPL), India:

After successfully executing its strategy of diversifying into liquid nutrients, the Company strengthened its product portfolio in the agricultural sector. The advanced formulation of Zinc Oxide SC, launched and marketed during the year, has gained strong traction in the market, earning recognition for its superior quality and proven effectiveness.

In addition, the Company developed and commercialized advanced formulations of Boron Ethanolamine and Concentrated Liquid Calcium. These product introductions, now firmly established in the portfolio, underscore NASPLs commitment to continuous innovation and its ability to translate R&D capabilities into tangible market offerings. Through these initiatives, NASPL has not only expanded its range of high-quality solutions for modern agriculture but also broadened its customer base, thereby consolidating its market presence and reinforcing its position as a trusted partner to the farming community.

For the year ended March 31, 2025, the Company reported total revenue from operations of Rs71 Lakhs, as against Rs2 Lakhs in the previous year, and a profit after tax of Rs5 Lakhs, compared to Rs2 Lakhs in the previous year.

Acquisition of majority stake by M/s.Coromandel International Limited:

With reference to the proposal for sale of the majority stake of the Company by the Promoters, the Board of Directors, at its meeting held on March 12, 2025, approved the execution of a Share Purchase Agreement ("Promoter SPA") with M/s.Coromandel International Limited ("Acquirer"), KLR Products Limited ("Promoter Seller"), Mrs. K. Lakshmi Raju, and Bright Town Investment Advisor Private Limited (individually a "Promoter" and collectively, the "Promoter Group"). Under the Promoter SPA, the Acquirer agreed to acquire 10,68,96,146 equity shares of the Company, representing 53.13% of the paid-up equity share capital ("Promoter SPA Shares"), from the Promoter Sellers (the "Promoter Sale Transaction"). The consummation of this transaction is subject to receipt of applicable governmental and statutory approvals, along with the fulfilment of other conditions precedent under the Promoter SPA.

Further, (a) Krishi Rasayan Exports Private Limited ("Investor Shareholder Seller 1"/"Tag Holder Seller 1"), and (b) Agro Life Science Corporation, a partnership firm represented by its partners, Mr. Rajesh Kumar Agarwal and Mr. Atul Churiwal ("Investor Shareholder Seller 2"/"Tag Holder Seller 2"), (together, the "Investor Shareholder Sellers"), have also entered into separate Share Purchase Agreements dated March 12, 2025 (collectively, the "Investor Shareholder Seller SPAs"), with the Acquirer for the sale of 5,500 equity shares each, aggregating to 11,000 equity shares of the Company (the "Investor Shareholder Seller Sale Shares").

These transactions collectively would result in a change in control of the Company. In accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("SEBI SAST Regulations"), a Detailed Public Statement was issued on March 20, 2025, followed by the filing of the Draft Letter of Offer ("DLoF") with SEBI on March 27, 2025.

In this regard, the Competition Commission of India (CCI), vide its letter dated July 01, 2025, accorded its approval for the aforesaid transactions. Subsequently, in compliance with the SEBI SAST Regulations, the Independent Directors Committee (IDC) of the Company met on July 30, 2025, to provide its recommendations

on the Open Offer and the proposed transaction. Thereafter, SEBI, vide its letter dated August 05, 2025, issued its final comments on the Draft Letter of Offer (DLoF) filed in connection with the Open Offer made by the Acquirer.

As on the date of this Report, the acquisition process and consummation of the sale transaction are in progress, with due adherence to all legal, regulatory, and contractual obligations in coordination with the Acquirer and other Stakeholders.

New Products Launched:

The Company has successfully commercialized manufacturing the following new Formulations namely:

Product	Formulation	Portfolio
Speed	IMIDACLOPRID 40% + FIPRONIL 40% WG	Insecticide
PYRAKILL	PYRAZOSULFURON ETHYL 70% WG	WG Insecticide
NAGARJUNA	CHLORANTRANILIPROLE	Insecticide
SURAKSHA GR	0.4% GR
CARPET	PYROXASULFONE 85% WG	Herbicide
DASH	PENOXOSULAM 1.02% + CYHALOFOP 5.1 % OD	Herbicide

Research & Development:

The Companys state-of-the-art R&D Centre at Shadnagar, near Hyderabad, continues to be a hub of innovation, driving product development and process improvement in line with the Government of Indias Make in India initiative. The Centre is actively engaged in the development of the processes for several active ingredients, intermediates, and formulations, which are at different stages of progress.

During the year under review,the processes for four technical products were successfully developed, of which two have been commercialised while the other two have advanced to the pilot stage. In addition, a pipeline of niche generic molecules is under development for future commercialisation. R&D efforts have also resulted in cost reduction for four regularly manufactured technical products. On the intermediate front, commercial-scale batches of select intermediates were executed for a multinational company, with another project in progress.

The Centre has also developed the process for four fluorine- containing molecules, several of which are moving into the commercialisation phase. Process innovation has led to the discovery of new methodologies, resulting in the filing of two provisional patents.

The Companys R&D facilities at Hyderabad, along with the Quality Control Laboratories at Srikakulam and Ethakota, have achieved significant milestones, including:

• ISO 17025:2017 Certificate of Accreditation from the National Accreditation Board for Testing and Calibration Laboratories (NABL);

• Integrated Management System (IMS) certification (ISO 9001, ISO 14001 & ISO 45001) from SGS;

• Recognition by the Department of Scientific and Industrial Research (DSIR), Government of India.

One of the core focus areas has been the development and registration of novel formulations. Three solo formulations have been successfully commercialised, while two two-way mixture formulations are ready for launch. Continuous improvement efforts are also underway to reduce formulation manufacturing costs.

The Good Laboratory Practice (GLP) certification awarded in 2021 has enabled the R&D Centre to conduct studies supporting global registrations, particularly in Africa and Southeast Asia. This certification was renewed in 2024 and remains valid until 2027. The GLP division has also extended services to external clients, contributing to revenues, while playing a vital role in facilitating both domestic and international registrations through extensive testing and documentation.

During the year under review, the Company secured 33 new registrations in India and 17 across eight International markets, taking the overall portfolio to 553 registrations in India and 137 in overseas markets. In parallel, 14 new patent applications were filed, reinforcing NACLs innovation pipeline and strengthening its intellectual property portfolio.

Environment Protection:

Your Company continues to maintain high standards in environmental management with its manufacturing facilities operating well within stipulated norms due to the efficient running of the Zero Liquid Discharge (ZLD) facilities in Srikakulam and Ethakota. Srikakulam manufacturing site has an online effluent and emission monitoring devices that continuously upload the data to Pollution Control Board website. These sites have also increased plantation area within the factory premises.

Your Company continues to enjoy the certifications ISO 9001:2015 (Quality Management), ISO 14001:2015 (Environmental Management), and ISO 45001:2018 (Occupational Health and Safety Management) standards, accredited for its proven standards covering in the areas of Quality, Environment, Safety and Health Management Systems respectively. Both Srikakulam and Ethakota Units are accredited by National Accreditation Board for Testing and Calibration of Laboratories (NABL).

Responsible Care (RC):

Your Company has effectively implemented the Responsible Care (RC) 7 Codes of Management Practices across all its sites and has been successfully recertified with the RC Logo by the Indian Chemical Council (ICC) for a further period of three years. This recertification reaffirms the Companys unwavering commitment to the principles of safety, health, environmental stewardship, and sustainable management of chemicals and processes.

Energy Efficiency and Emission Reduction:

During the year under review, the Company undertook several initiatives to strengthen its focus on sustainability, energy efficiency, and workplace safety. At both the Ethakota and Srikakulam manufacturing sites, significant progress was achieved in adopting energy-efficient technologies, resulting in reduced operational costs and a marked decline in carbon emissions.

The Company also advanced its safety culture through the introduction of Process Safety Management (PSM), aligning OSHAs 14 elements with the Indian Chemical Councils (ICC) Responsible Care (RC) 20 elements at the Srikakulam and Spec- Chem Dahej sites. Further, a Behaviour-Based Safety (BBS) program has been rolled out to encourage proactive safety awareness and accountability among employees.

To foster awareness and engagement, various programs such as National Safety Week, World Environment Day, Fire Service Day, and Electrical Safety Week were organized across all locations. Recognition initiatives, including Suraksha Sammelan at Srikakulam, Suraksha Yojana at Dahej, and the Safety Monthly Star Program, were introduced to acknowledge best practices and inspire continuous improvement.

The Company remained fully compliant with all statutory requirements during the year. Expansion-related approvals are under progress with the Central Pollution Control Board (CPCB) and the respective State Pollution Control Boards (SPCBs) for both the Srikakulam and Dahej facilities. Additionally, Quality Circles were established at manufacturing units to promote employee- driven innovation and operational excellence.

Water Conservation and Reuse:

Our commitment to responsible water usage is evident through the implementation of water harvesting systems at all sites. Rainwater is efficiently collected and stored for reuse in our plantation and utility needs.

Health and Safety:

The Company continued to strengthen its commitment to health, safety, and sustainability through various initiatives during the year. The EHS and Sustainability team actively organized awareness programs such as National Safety Week, World Environment Day, Fire Service Week, and Electrical Safety Week across all manufacturing locations, fostering a culture of safety and responsibility. Employees were encouraged to stay informed and engaged through EHS newsletters, safety flashes, safety contacts, and cautionary notes, ensuring regular communication on critical safety matters.

To further reinforce a safety-first culture, initiatives such as Suraksha Sammelan and the Safety Monthly Star Program were introduced to recognize and reward best practices across all sites. These programs not only celebrated employee contributions but also encouraged continuous improvement in safety performance.

Through these collective measures, your Company has demonstrated its unwavering dedication to operational integrity, employee well-being, environmental sustainability, and workplace safety, thereby reaffirming its position as a responsible and trusted industry leader.

Share Capital:

During the year under review, your Company has allotted 21,500 fully paid equity shares, under Nagarjuna Agrichem Ltd., Employee Stock Option Scheme-2015 and 2,88,333 fully paid equity shares under NACL Employee Stock Option Scheme- 2020, upon exercise of Stock Option by the Eligible Employees of the Company under the respective ESOS Schemes and 17,24,137 shares has allotted under Preferential issue to M/s EQ India Fund under Non-Promoter Category and these shares were duly admitted for trading on the Stock Exchange(s). The equity shares issued pursuant to the above Employee Stock Option Schemes and Equity shares issued under Preferential allotment ranks pari- passu with the existing equity shares of the Company.

Subsequent to the above allotments, the paid up capital of your Company stand increased from Rs 19,91,69,177/- (comprising of 19,91,69,177 fully paid up equity shares of Rs 1/- per equity share) to Rs 20,12,03,147/- (comprising of 20,12,03,147 fully paid up equity shares of Rs 1/- per equity share).

Employee Stock Option Scheme:

The Company has the aforesaid two stock option ie. ESOS-2015 Scheme and ESOS-2020. Both the Schemes are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

a) ESOS 2015 Scheme:

During the year under review, the Company allotted 21,500 fully paid equity shares to eligible employees upon exercise of vested stock options granted under the existing Employee Stock Option Scheme. With this allotment, no further stock options remain to be granted, vested, or exercised under the said Scheme, and accordingly, the Scheme stands formally closed.

b) ESOS 2020 Scheme:

During the year under review, the Company has granted 3,70,000 stock options under ESOS-2020 Scheme to the Eligible Employees. Each option would entitle the holders of the option to apply for one equity share of the Company.

The Company has allotted 2,88,333 fully paid equity shares to the Eligible Employees upon exercise of the vested stock options.

In compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, a certificate from the Secretarial Auditor of the Company confirming that the ESOS-2015 Scheme and ESOS 2020 Scheme are being implemented in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the resolutions passed by the Members, will be placed at the ensuing Annual General Meeting. The details required under Rule 12(9) of Companies (Share Capital and Debentures) Rules, 2014 and the disclosure required to be made under Regulation 14 of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 with regard to the ESOS- 2015 & ESOS-2020 is available on our Company Website i.e. www. naclind.com.

Material Changes and Commitments:

Except the changed specifically described in this report, there have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

Subsidiary and Associate Companies and Consolidation of Financial Statements:

Pursuant to the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Companies Act, 2013 ("the Act"), and the applicable Indian Accounting Standards (Ind AS 110 - Consolidated Financial Statements), the Audited Consolidated Financial Statements of the Company for the year ended March 31, 2025, form part of this Annual Report. The Consolidated Financial Statements have been prepared by incorporating the financial statements of its wholly-owned subsidiaries M/s. NACL Spec-Chem Limited, M/s.NACL Multichem Private Limited, M/s.LR Research Laboratories Private Limited, M/s.NACL Industries (Nigeria) Limited, M/s.Nagarjuna Agrichem

(Australia) Pty Ltd and M/s.NACL Agri-Solutions Private Limited on a line-by-line basis. Further, the investment in Nasense Labs Private Limited, an Associate Company, has been accounted for under the equity method in accordance with Ind AS 28 - Investments in Associates and Joint Ventures.

The Statement containing the salient features of the financial performance of Subsidiaries and Associate, in the prescribed format Form AOC-1, is attached as Annexure - I to this Report.

During the year under review, no company became or ceased to be a Subsidiary, Joint Venture, or Associate Company of NACL Industries Limited. There has also been no material change in the nature of business of the aforesaid Subsidiaries and Associate Company. Further, the Company does not have any Subsidiary that qualifies as a material subsidiary under the Listing Regulations.

In accordance with Section 136(1) of the Act read with Regulation 46 of the Listing Regulations, the following documents are made available on the Companys website at www.naclind.com:

a) The Annual Report of the Company containing its Standalone and Consolidated Financial Statements; and

b) The Annual Accounts of each of the Subsidiary Companies.

Internal Financial Control Systems and their adequacy:

The Company has in place adequate internal financial controls commensurate with the size and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedure in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information.

The Company has adopted accounting policies which are in line with the Indian Accounting Standards and the Act. These are in accordance with generally accepted accounting principles in India. Changes in policies, if required, are made in consultation with the Auditors and are approved by the Audit Committee.

The Companys internal audit systems are geared towards ensuring adequate internal controls commensurate with the size and needs of the business, with the objective of efficient conduct of operations through adherence to the Companys policies, identifying areas of improvement, evaluating the reliability of financial statements, ensuring compliances with applicable laws and regulations and safeguarding of assets from unauthorized use.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors, including audit of the internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by Management and the relevant Board and Committees including the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during the financial year 2024-25.

Auditors:

a) Statutory Auditor and Audit Reports:

M/s. BSR and Co. Chartered Accountants, (Firm Registration No. 128510W), Chartered Accountants, were appointed as Statutory Auditors of the Company at the 35^th Annual General Meeting held on September 29, 2022 for a period of 5 years commencing form the conclusion of 35^th Annual General Meeting till the conclusion of 40^th Annual General Meeting to be held in the year 2027. The firm has consented and confirmed that the appointment is within the limit specified under section 141(3)(g) of the Companies Act, 2013. The Statutory Auditors have also confirmed that they are not disqualified to be appointed as such in terms of the proviso to section 139(1), 141(2) and 141(3) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.

The Audit Report of BSR and Co on the Financial Statements of the Company for the Financial Year 2022-23 is a part of Annual Report. The notes on the financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. There are no qualifications, reservations, adverse remarks or disclaimers by the statutory auditors in their report.

b) Cost Auditor:

Pursuant to Section 148 of the Companies Act, 2013, the Board of Directors of the Company, on the recommendation of the Audit Committee appointed M/s. K. Narasimha Murthy & Co., Cost Accountants, Hyderabad to conduct cost audits relating to Insecticides (Technical Grade and Formulations), of the Company for the year ended March 31, 2026. The Company has received their written consent that the appointment will be in accordance with the applicable provisions of the Act, and rules framed thereunder. Pursuant to the provisions of Section 148 of the Act read with Rules made thereunder, members are requested to consider the ratification of the remuneration of Rs 8 Lakhs payable to M/s. K. Narasimha Murthy & Co., Cost Accountants, Hyderabad, for the financial year 2025-26.

Your Company is maintaining all the cost records referred above and M/s. K. Narasimha Murthy & Co., Cost Auditors, have issued a cost audit report for FY 2025 which does not contain any qualification, reservation or adverse remarks and the same report were duly filed with the Central Government.

c) Internal Auditor:

The Board of Directors of the Company has appointed M/s. M.Bhaskara Rao & Co., Chartered Accountants, Hyderabad, as Internal Auditors to conduct internal audit of the Company for the financial year ended March 31, 2025 and their reports are reviewed by the Audit Committee from time to time. The Internal Auditors monitor and evaluate the efficiency of the internal control system of the Company, its compliance with applicable laws/regulations, accounting procedure and policies. Based on the reports of the Internal Auditor, corrective actions will be undertaken, thereby strengthening the controls. Significant audit observations and action plans were presented to the Audit Committee of the Board on a quarterly basis.

The Board of Directors, based on the recommendation of the Audit Committee, has re-appointed M/s. M. Bhaskara Rao & Co., Chartered Accountants, Hyderabad, as Internal Auditors for the first two quarters of the Financial Year 2025-26.

d) Secretarial Auditor and Secretarial Audit Report:

Pursuant to Section 204 of the Act read with the Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. B S S & Associates, Company Secretaries, to carry out secretarial audit in terms of the Act for the financial year 2024-25. The secretarial audit report for the FY 2024-25 issued by M/s.B S

5 & Associates, Practicing Company Secretary in form MR-3 is enclosed to this report as Annexure - II and the Secretarial Audit Report does not contain any qualification, reservation, adverse remark, or disclaimer, except for the three remarks/ observations specifically highlighted (in bold and italics) in the concerned paragraph of MR-3 (2^nd page), in respect of which the first item has been settled through the payment of the prescribe penalty and the other matters have since been duly noted/addressed. Pursuant to Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has obtained the Annual Secretarial Compliance Report from M/s. B S S & Associates and submitted the same to the stock exchange where shares of the Company are listed.

Further, the Board of Directors, at its meeting held on August 07, 2025, approved the appointment of M/s. R. Sridharan

6 Associates, Practicing Company Secretaries, as the Secretarial Auditors of the Company for a period of five years, commencing from the conclusion of the ensuing Annual General Meeting and continuing until the conclusion of the Annual General Meeting to be held in the financial year 2030.

Board, Committees of the Board and Other information:

a) Directors:

The Companys Board comprises 11 (Eleven) Directors, out of which 2 (Two) are Non-Executive, Non-Independent Directors (NEDs), including 1 (one) Woman Director. Out of the remaining Directors, 6 (Six) are Non-Executive, Independent Directors, including 2 (Two) Woman Independent Director, 2 (Two) are Investor Nominee Directors, and 1 (One) is an Executive Director. However, during the year under review, the following Directors ceased to be on the Board of the Company:

1) Mr. N. Vijayaraghavan, Independent Director (Resigned effective August 16, 2024).

2) Mr. C. V. Rajulu, Non-Executive & Non-Independent Director (Resigned effective March 12, 2025).

3) Mr. M. Pavan Kumar, Managing Director & CEO (Resigned effective March 12, 2025).

b) Board Meeting:

During the financial year 2024-25, 11 (Eleven) meetings of the Board were held. The details of these meetings are provided in the Corporate Governance Report, which forms part of this Annual Report. The Company complied with the provisions of the Act and the Listing Regulations with respect to the prescribed time gap between two meetings.

c) Independent Directors and their declaration of Independence:

In terms of Sections 149, 152, Schedule IV and all other applicable provisions of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory amendment(s), modification(s) or re-enactment thereof for the time being in force), the Independent Director can hold office for a term of up to five (5) consecutive years on the Board of Directors of the Company and shall not be liable to retire by rotation.

All the Independent Directors have given a declaration that they meet the criteria of independence laid down under Section 149(6) of the Act read with Regulation 16(b) of Listing Regulations.

In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.

d) Familiarization Programme for the Independent Directors:

In compliance with the requirement of Listing Regulations, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The same is available on the website of the Company i.e., www.naclind.com.

Through the Familiarization programme, the Company apprises the Independent Directors about the business model, corporate strategy, business plans and operations of the Company. These Directors are also informed about the financial performance, annual budgets, internal control system, statutory compliances etc. They are also familiarized with Companys vision, core values, ethics and corporate governance practices.

At the time of appointment of Independent Director, necessary information including various documents such as the information about Company, Memorandum and Articles of Association, Annual Reports for previous 2 years, Investor Presentations and recent Media Releases, Brochures, Organization policies are provided. Further, a formal letter of appointment has also given, explaining fiduciary duties, roles, responsibility and the accompanying liabilities that come with the appointment as an Independent Director of the Company.

On an on-going basis, periodic presentations are made at the Board and Committee meetings, on the performance updates of the Company, Industry scenario, business strategy, internal control and risks involved and mitigation plan. The Directors are also provided with quarterly update on relevant statutory changes, judicial pronouncements and important amendments.

e) Evaluation of performance of the Board of Directors:

Pursuant to the provisions of the Act, and Listing Regulations, the Board has carried out the evaluation of its own performance and Committees of the Board, the performances of Directors individually, the Executive Director, the Chairperson of the Board etc. Various parameters under the guidance note issued by the Institute of Company Secretaries of India and SEBI, were considered for evaluation and after receiving the inputs from the Directors, the performance evaluation exercise was carried out. The parameters include attendance of Directors at Board and Committee meetings, integrity, credibility, expertise and trustworthiness of Directors, Boards monitoring of various compliances, laying down and effective implementation of various policies, level of engagement and contribution of the Directors, safeguarding the interest of all stakeholders etc. The performance evaluation of the Board as a whole was carried out by the Independent Directors. The performance evaluation of each Independent Director was carried out by the Board. The Directors expressed their satisfaction with the evaluation process.

In a separate meeting, the Independent Directors evaluated the performance of the Non-Independent Directors and performance of the Board as a whole. They also evaluated the performance of the Chairperson taking into account the views of Executive Director and Non-Executive Director.

f) Audit Committee:

The Audit Committee comprising of Mr. Santanu Mukherjee as the Chairman and Mr. Sudhakar Kudva and Mr.N.Sambasiva Rao as the members. The details about the Audit Committee including the brief description of its terms of reference and number of meetings held during the year are mentioned in the Corporate Governance Report. There have been no instances during the year when recommendations of the Audit Committee were not accepted by the Board.

g) Directors Responsibility Statement:

Pursuant to Section 134(3)(c) and 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures;

b) it has selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2025 and of the Profit/Loss of the Company for the year ended on that date;

c) it has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) it has prepared the Annual Accounts of the Company on a going concern basis;

e) it has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) it has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

h) Key Managerial Personnel:

In terms of Section 203 of the Companies Act, 2013, the following officials are the Key Managerial Personnel (KMP) of the Company:

i) Mr. G Veera Bhadram - Whole-time Director (Effective March 12, 2025)

ii) Mr. Anish T. Mathew - Chief Financial Officer (Effective December 13, 2024)

iii) Mr. Satish Kumar Subudhi - Sr. Vice President - Legal & Company Secretary

During the year under review, the following changes took place in the Key Managerial Personnel of the Company:

1) Mr. R. K. S. Prasad, Chief Financial Officer, retired from his position with effect from December 13, 2024. The Board, on the recommendation of the Audit Committee, appointed Mr. Anish T. Mathew as the Chief Financial Officer of the Company with effect from December 13,

2024.

2) Mr. M. Pavan Kumar stepped down from the position of Managing Director & CEO of the Company. Subsequently, the Board appointed Mr. G. V. Bhadram as a Whole-Time Director with effect from March 12, 2025.

i) Termination of agreements:

The Company had earlier entered into a Consultancy Agreement with Mr. C. V. Rajulu, who resigned as a NonExecutive, Non-Independent Director w.e.f March 12, 2025, and a Business Advisory Agreement with Mr. Raj Kaul, who resigned as a Non-Executive, Non-Independent Director w.e.f August 08, 2025. The said agreements remained effective till June 23, 2025 (in the case of Mr. C. V. Rajulu) and May 31, 2025 (in the case of Mr. Raj Kaul), respectively, and have since been terminated.

j) Meeting of Independent Directors:

The details on the separate meeting of the Independent Directors are reported in the Report on Corporate Governance.

Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel.

Your Company has laid down well-defined criteria for the selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel. The details of the same forming part of Companys Nomination and Remuneration Policy are available at the Companys website at www.naclind.com.

Criteria for making payment to Non-Executive Directors of the Company.

Your Company has laid down well-defined criteria for making payment to Non-Executive Directors of the Company. The details of the same are available at the Companys website at www.naclind.com.

Corporate Social Responsibility:

Corporate Social Responsibility (CSR) has been an integral part of your Companys culture and it has been associated, directly or indirectly, for contributing towards societys development. For the year under review, the company carried out several CSR activities in the areas/villages surrounding the factories of the Company. Such activities includes RO Water Supply to surrounding Villages, Village & Community Development, Scholarships to Merit students, contribution to Vidhya Volunteer Scheme, street lightning and bore-well maintenance, development of school facilities, community centers and bus shelters in the surrounding villages of the factories, providing medical services and vocational courses and conducting various medical camps, etc. These projects are largely covered under Schedule VII of the Companies Act, 2013 (Act).

In accordance with the CSR provisions in the Act, the Company has formed a CSR Committee and the CSR Policy is in conformity with the provisions of the Act. The CSR Policy can be accessed on the Companys website at http://www.naclind.com. The Annual Report of CSR activities are annexed herewith as Annexure - III and forming part of this Report.

Change in the nature of business:

There is no change in the nature of business of the Company.

Significant and Material Orders passed by the Regulators or Courts:

During the year, the Company has not received any significant and material orders passed from Regulators or Courts or Tribunals impacting the going concern status and the Companys operations in future.

Particulars of Loans, Guarantees or Investments under Section 186:

The Company makes investments or extends loans/guarantees to its wholly-owned subsidiaries for their business purposes.

Details of loans, guarantees and investments covered under Section 186 of the Act, along with the purpose for which such loan or guarantee was proposed to be utilized by the recipient, form part of the notes to the financial statements provided in this Annual Report.

Extracts of Annual Return:

Pursuant to Section 92(3) and 134(3)(a) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extract of the Annual Return of the Company is available on the website of the Company at www.naclind.com.

Risk Management Policy:

Pursuant to the provisions of Section 134, and other applicable provisions if any, of the Act and Listing Regulations, the Company constituted the Risk Management Committee and framed Risk Management Policy, which inter-alia covers implementation and monitoring of the risk management plan for the Company. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The details about Committee including the brief description of its terms of reference are given in the Corporate Governance Report. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

Related Party Transactions:

All the related party transactions are entered into during the financial year were on arms length basis and in the ordinary course of Companys business and are in compliance with the applicable provisions of the and Regulation 23 of Listing Regulations. The Company has not entered into any contract, arrangement or transactions with any related party which could be considered as material within the meaning of Regulation 23 of the Listing Regulations. Related Party Transactions (RPTs) under IndAS (Indian Accounting Standards)-24 are disclosed in the notes to the financial statement.

Necessary disclosures and the statement of all related party transactions are presented before the Audit Committee and the Board of Directors on a quarterly basis specifying the nature, value and terms and conditions of the transactions. All Related Party Transactions are approved by the Audit Committee and omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted are reviewed on a quarterly basis by the Audit Committee.

The Related Party Transactions Policy as approved by the Board is uploaded on the Companys website www.naclind.com. The details of the transactions with Related Parties are provided in the accompanying financial statements.

Vigil Mechanism/Whistle Blower Policy:

The Company has implemented Whistle Blower Policy to deal with any fraud, irregularity or mismanagement in the Company. The policy enables any employee or Director to directly communicate to the Chairman of the Audit Committee to report any fraud, irregularity or mismanagement in the Company. The policy ensures strict confidentiality while dealing with concerns and also that no discrimination or victimization is meted out to any whistleblower. The Whistle Blower Policy as approved by the Board is uploaded on the Companys website www.naclind.com. During the year under review, your Company has not received any complaints under the said policy of the Company. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

Nomination and Remuneration Policy:

Pursuant to Section 178(3) of the Act, the Company has adopted a policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management Personnel. The Nomination and Remuneration Committee (NRC) has formulated the criteria for determining qualification, positive attributes and independence of Directors in terms of provisions of Section 178(3) of the Act and as Listing Regulations. The details about Committee including the brief description of its terms of reference are given in the Corporate Governance Report.

Corporate Governance:

In compliance with Regulation 34 read with Para-C of Schedule V of Listing Regulations, a separate report on Corporate Governance has been included in this Annual Report together with the Auditors Certificate confirming compliance of the Corporate Governance as stipulated under the said Regulations. All the Board members and the Senior Management Personnel have affirmed compliance with the Companies "Code of Conduct for Board and Senior Management Personnel" for the financial year 2024-25.

A certificate signed by the Whole Time Director and Chief Financial Officer (CFO) certifying the financial statements and other matters as required under Regulation 17(8) of the Listing Regulations, forms part of this Annual Report.

Management Discussion and Analysis Report and Business Responsibility Report:

Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 16(b) of the Listing Regulations, is presented in a separate section forming part of this Annual Report. A Business Responsibility and Sustainability Report containing the requisite details under Regulation 34 of the Listing Regulations has been included in this Annual Report.

Prevention of Sexual Harassment of Women at workplace:

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a Policy for Prevention of Sexual Harassment in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"). The Policy, which is gender-neutral, ensures a safe and enabling work environment, free from any form of harassment or discrimination.

The Policy provides protection to employees, lays down a fair and transparent mechanism for prevention and redressal of complaints, and prescribes procedures for effective resolution. The Company has constituted an Internal Complaints Committee (ICC) in accordance with the provisions of the POSH Act.

To strengthen awareness, regular training and sensitization programs are conducted across all locations to educate employees about the provisions of the POSH Act and the Companys Policy.

During the financial year 2024-25, no complaints of sexual harassment were received by the Company.

Statement of Compliance with the provisions relating to the Maternity Benefit Act 1961:

The Company has complied with relevant provisions of the Maternity Benefit Act, 1961. There were one beneficiaries who availed maternity benefits during FY 2024-25 including leave and benefit payments.

Brand Protections:

Your Company has taken appropriate actions against counterfeits, fakes and other forms of unfair competitions/trade practices.

Fixed Deposit:

Your Company has not accepted any fixed deposits from the public during the year under review, and no such amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

Industrial Relations:

The industrial relations at the factories and head office continued to be cordial.

Insurance:

All the assets and insurable interests of your Company including inventories, buildings, plant and machinery, enactments are adequately insured.

Particulars of Employees and Remuneration:

Pursuant to the provisions of Section 136 (1) of the Act and as advised, the particulars of employees as required under Section 197 (12) of the Act read with Rule 5 (1) and 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure-IV to this report.

Compliance with Secretarial Standards:

During the year under review, your Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Reporting of Frauds:

There was no instance of fraud during the year under review, which required the Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Companies Act, 2013 and the rules made thereunder. Hence, no detail is required to be disclosed by the Board under Section 134(3)(ca) of the Companies Act, 2013.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

Disclosures required under the Section 134(3)(m) of the Act relating to Conservation of Energy, Technology Absorption and Foreign Exchange Outgo and Earning, in terms of Rule 8 of the Companies (Accounts) Rules, 2014, are set out in a separate statement attached hereto as Annexure - V and forms part of this report.

Other Confirmation:

No application under the Insolvency and Bankruptcy Code, 2016 (IBC) was made on the Company during the year. Further, no proceeding under the IBC was initiated or is pending as at March 31, 2025. There was no instance of one time settlement with any Bank or Financial Institution.

Acknowledgement:

Your Directors thank the Companys Bankers and the Financial Institutions for their help and co-operation extended throughout the year. Your Directors place on record their appreciation for the support and co-operation that the Company received from its Stakeholders, Customers, Agents, Suppliers, Employees, various Government/Non-Government Departments, Associates and Community in the vicinity of the plants. Your Directors also record their appreciation for the excellent operational performance of the staff of the Company that contributed to the achievements of the Company. The Directors also acknowledge with much gratitude, the continued trust and confidence reposed by the Dealers/ Customers of the Company. Your Directors look forward to the future with confidence.

	For and on behalf of the Board
	K Lakshmi Raju	G Veera Bhadram
	Chairperson	Whole Time Director
	(DIN: 00545776)	(DIN: 00114611)
Place: Hyderabad
Date: August 07, 2025